Do you own a house in Spain and are you a resident outside of Spain? Outside of Spain you do not owe tax on your Spanish holiday home. Taxes when buying a home
You pay 10% VAT (IVA) or transfer tax (ITP) on the purchase price of the house.
Taxes when you sell your house in Spain
When selling the property you pay a tax (Plusvalia) between 0.4% -0.9%, depending on the municipality where the house is located on the catastral value. Basis is added value of the land You also pay a profit tax on the difference of the value on purchase stated on the escritura or Nota Simple (proof of ownership) and selling price. This tax is levied on your income tax return in Spain. The rate is 19% (depending on the income tax).
Taxes on rental
When renting you pay 19% on the rental income less costs. You pay pro rata 19% over the months that you did not rent on a basis of 2% of the catastral value, depending on the municipality.
Taxes on property
As a homeowner in Spain, you pay real property tax (IBI) on your property. This amounts to 0.4% over the catastral value.
You are liable for capital tax if the net value of your home exceeds € 700,000. The rate is 0.2% -2.5%.
Taxation for inheritance and donation
Heirs pay inheritance tax on the property concerned. Endowed pays gift tax in the country where the property is located (Spain).
If you own a property in Spain, you are obliged to submit an annual tax return of your property, possibly with a supplement of income that you enjoy in Spain.
The annual taxes that you have to deal with as a homeowner are:
Municipal charges for collection of refuse, sewerage etc. (Tasas)
Property tax (IBI- Impuestos sobre bienes inmuebles)
The moment you have a house or real estate in Spain, you are obliged to appoint a tax representative who will provide the declarations for you. This fiscal representative is also the point of contact for the tax-levying authorities.